Chrysler negotiating to buy SHAP?

Sources claim that Chrysler is negotiating with Old CarCo and the U.S. Bankruptcy Court to buy the Sterling Heights Assembly Plant. The move would save some 1,200 jobs that would otherwise have been eliminated at the end of this year.

Sterling Heights was one of the facilities left behind when the reorganized Chrysler Group LLC emerged from bankruptcy last summer.

Chrysler is operating under a deadline; the Sterling Heights City Council voted last night to authorize a February 16 deadline for Chrysler to reach a deal for the plant and receive a $7.4 million tax abatement. The council is hoping the plant can remain open through 2012 and receive new product after the Sebring and Avenger mid-size sedans built at plant Sterling Heights are replaced by Fiat-based cars in 2013.

Sergio Marchionne, in earlier interviews, appeared dismissive of the idea of keeping SHAP open, apparently preferring to build a new plant (or perhaps buy a closing GM facility); however, this could be a negotiating tactic, or he might have been convinced to work with SHAP.

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